Zee Media Corporation Ltd Management Discussions.

A detailed report on Management discussion and analysis is provided separately as a part of the Annual Report.

CERTIFICATION ON COMPLIANCE OF CONDITIONS OF CORPORATE GOVERNANCE

The Certificate from the Statutory Auditor confirming compliance with conditions of Corporate Governance as stipulated in Listing Regulations is annexed to this Corporate Governance Report.

CEO/CFO CERTIFICATION

In terms of the provisions of Regulation 17 (8) of the Listing Regulations, the certification on the financial statements of the Company, as certified by the Chief Executive Officer and Chief Financial Officer of your Company is annexed to this Corporate Governance Report.

MANAGEMENT DISCUSSION AND ANALYSIS

The figures have been stated in millions (unless stated otherwise) in this MD&A for better readability. Investors are hereby informed that this discussion contains forward looking statements that involve risks and uncertainties including, but not limited to, risks inherent in the Companys growth strategy, acquisition plans, dependence on certain businesses, and dependence on availability of qualified and trained manpower and other factors. The following discussion and analysis should be read in conjunction with the Companys financial statements included herein and the notes thereto.

COMPANY OVERVIEW:

Zee Media Corporation Limited (ZMCL) (BSE Code: 532794,

NSE Code: ZEEMEDIA), is Indias leading News organization with interests in Global, National and Regional News channels and Digital News Publishing. The Company was incorporated as Zee Sports Limited on August 27, 1999, and was later renamed as Zee News Limited with effect from May 27, 2004 and thereafter to Zee Media Corporation Limited with effect from July 6, 2013. The Companys business portfolio comprises of directly owned news media and one channel through its 100% owned subsidiary Zee Akaash News Private Limited. The Company has a country-wide network of news bureaus and correspondents, strong editorial team equipped with well-known professionals accomplished in 24/7 broadcast journalism and world-class technology for content creation, packaging, and broadcasting. The TV news channels operated by the Company and its subsidiary are:

S. N. Name of the Channel primary coverage region / Genre language
1 Zee News National Hindi
2 Zee Business National - Business News Hindi
3 Zee Hindustan National Hindi
4 WION Global English
5 Zee Salaam Pan India Urdu
6 Zee 24 Taas Maharashtra Marathi
7 Zee 24 Ghanta (through Zee Akaash News Private Limited) West Bengal Bengali
8 Zee Punjab Haryana Himachal Punjab, Haryana, Himachal Pradesh and Jammu & Kashmir Punjabi and Hindi
9 Zee Madhya Pradesh Chhattisgarh Madhya Pradesh and Chhattisgarh Hindi
10 Zee Rajasthan Rajasthan Hindi
11 Zee Odisha Odisha Odiya
12 Zee Bihar Jharkhand Bihar and Jharkhand Hindi
13 Zee 24 Kalak Gujarat Gujarati
14 Zee Uttar Pradesh Uttarakhand Uttar Pradesh and Uttarakhand Hindi

The Company also has an extensive digital presence with a strong digital portfolio comprising 18 brand websites and 2 Apps across 12 languages:

S. N. Brand Website uRL / App language
1 Zee News Hindi zeenews.com/hindi Hindi
2 Zee News English zeenews.com English
3 Zee Hindustan zeehindustan.in Hindi
4 WION wionews.com English
5 Zee Salaam zeesalaam.in Urdu
6 Zee 24 Taas zee24taas.in Marathi
7 Zee 24 Ghanta zee24ghanta.com Bengali
8 Zee Punjab Haryana Himachal zeephh.com Punjabi and Hindi
9 Zee Madhya Pradesh Chhattisgarh zeempcg.com Hindi
10 Zee Rajasthan zeerajasthan.com Hindi
S. N. Brand Website URL / App language
11 Zee Odisha zeeodisha.tv Odia
12 Zee Bihar Jharkhand zeebiharjharkhand.com Hindi
13 Zee 24 Kalak zee24kalak.in Gujarati
14 Zee Uttar Pradesh Uttarakhand zeeupuk.com Hindi
15 Zee Hindustan Tamil zeehindustantamil.in Tamil
16 Zee Hindustan Telugu zeehindustantelugu.in Telugu
17 Zee Hindustan Kannada zeehindustankannada.in Kannada
18 Zee Hindustan Malayalam zeehindustanmalayalam.in Malayalam
19 Zee News App Hindi, English, Bengali, Marathi, Gujarati, Tamil, Telugu, Kannada, Malayalam
20 WION App English

With a view to drive business growth that is consistent, sustainable, profitable and competitive and also to build a leadership strength that is growth oriented, agile and committed to building strong organization capability themselves, the Company, in line with the core talent philosophy of internal recognition and matching of organisation opportunities with individual aspirations, had during the year announced role expansion by segregating its channels into 3 Clusters each of which is being headed by a CEO, as under:

• Mr. Sudhir Chaudhary as CEO of Cluster 1 will be responsible for Zee News, Zee Business, WION, Zee 24 Taas, Integrated Media Newsroom (IMN) and related digital properties (Editorial Only);

• Mr. Purushottam Vaishnava as CEO of Cluster 2, will be responsible for Zee Hindustan, Zee Rajasthan, Zee Bihar

Jharkhand, Zee Odisha, Zee 24 Kalak, Zee 24 Ghanta and related digital properties (Editorial Only); and

• Mr. Dileep Kumar Tiwari as CEO of Cluster 3, will be responsible for Zee MP-CG, Zee UP-UK, Zee Salaam, Zee PHH and related digital properties (Editorial Only).

MEDIA & ENTERTAINMENT INDUSTRY

As per FICCI-EY "The era of consumer A.R.T. - Acquisition Retention and Transaction", The Indian Media and Entertainment (M&E) sector reached Rs 1.82 trillion (US$25.7 billion) in 2019, registering a growth of 9% as compared to 2018.

With its current trajectory, the M&E sector in India is expected to cross Rs 2.4 trillion (US$34 billion) by 2022, at a CAGR of 10%.

The TV industry grew from Rs 740 billion to Rs 788 billion in 2019, a growth of 6.4%. TV advertising grew 5% to INR 320 billion while subscription grew 7.5% to INR 468 billion. Regional channels benefited from the New Tariff Order as their consumption increased by over 20% in certain cases. General entertainment and movie channels led with 74% of viewership. On the back of several key announcements by the central and state governments such as Article 370, the Citizenship Amendment Act, and a general election, the news genre witnessed a growth to almost 9% of total viewership, up from 7% in 2018. In sports cricket emerged as the big winner in 2019 as it accounted for over 80% of the sports viewership, up from 70% last year, due to the ICC World Cup. Television will remain the largest earner of advertising revenues even in 2025, approaching INR 570 billion. Viewership of regional language channels will continue to grow and reach 55% of total viewership in India as their content quality improves further. Content viewed on smart TV sets will begin to reflect that consumed on mobile phones, providing a window for user generated content companies and other non-broadcasters to serve content on the connected television screen.

In 2019, digital media grew 31% to reach Rs 221 billion and is expected to grow at 23% CAGR to reach Rs 414 billion by 2022. Digital advertising grew 24% to INR 192 billion driven by increased consumption of content on digital platforms and marketeers preference to measure performance. SME and long tail advertisers increased their spends on digital media as well. Pay digital subscribers crossed 10 million for the first time as sports and other premium content were put behind a paywall. Consequently, subscription revenue grew 106% to Rs 29 billion. Digital consumption grew across platforms where video viewers increased by 16%, audio streamers by 33% and news consumers by 22%. The news consumption will continue to attract wider section of the Community due to events around elections, sports, pandemic, and government related initiatives. In recent times lockdown compelled the viewers to consume more and more news items due to fear, adventure and remedial measures for pandemic, stress and overall information on worldly affairs. Zee Media being a broadcaster providing news channels in different languages provides opportunity to the advertisers to launch, penetrate, popularize, impact assessment of product, policy and wider acceptability.

The TV news genre, where the Company primarily operates, contributed 8.9% of the TV viewership in 2019, up from 7.3% in 2018 on account of major events throughout the year such as Pulwama and Balakot attacks in February, general elections in April-May, state elections in April, October, and December, repeal of Article 370 in August, Ram Janmabhoomi judgment in November, and passing of the Citizenship Amendment Act in December. The genre, however, commands a much higher share of advertising volumes as compared to its share of viewership. Hindi news, Bengali news, and Hindi regional news retained their positions in the top 10 segments in terms of share of advertising volumes in 2019. Hindi regional news and Gujarati news also saw among the highest additions of new advertisers during the year. The news channels also use events and activations as a significant avenue for revenue generation.

The news genre also showed a similarly upbeat growth trend in the digital segment. The Indian users spent 7% of the total time spent on the phone consuming news, which makes it the 3rd highest content category in terms of share of consumption time. India was at the second position among the online news consuming nations with 282 million unique visitors in September 2019. The most popular category among the online news visitors was the General news at 97% of online news visitors, which was followed by business/ finance news, with 62% of online news visitors. Unlike TV news, the share of Hindi consumption in online news was much higher at 68%, leaving a high scope for more growth in the consumption of news in regional languages. FDI up to 26% was permitted

under the government approval route for digital news and current affairs upload and stream in December 2019.

Outlook and impact of COViD

Before COVID-19 pandemic and resultant lockdowns, the M&E sector in India was expected to cross 2.4 trillion (US$34 billion) by 2022 at a CAGR of 10% according to the FICCI-EY report. However, the economic slowdown, which began in H2 2019 and intensified due to COVID-19, may result in these projections not being realised. While the years 2020 and 2021 would be most affected with the economy projected to contract in the former, there is likely to be a spillover effect in 2022 if a permanent antidote to the Sars-Cov2 virus is not found soon enough. The pandemic has affected most industries badly, and there is likely to be a negative impact of 18% in the advertising revenues, whereas a significant uptick in content consumption because of lockdowns is likely to limit the hit to subscription revenues in the region of -14%. The overall impact on the industry is expected to be in the region of 250 billion (Source: CRISIL Press Release, May 11, 2020, https://bit.ly/31DDGSM). Another major upheaval for the TV industry may come from the NTO 2.0 (or NTO 2020) issued by TRAI in January 2020. It seeks to reduce the cap on MRP of individual channels part of any bouquet to 12 per month from 19 per month and restricts the discount on channel bouquets to around 33% to promote a la carte offerings (Source: Business Today report, July 25, 2020, https://bit. ly/33Kr4Mj). Contrary to its object, the order is expected to result in higher prices and subscriber base decline. The implementation of the order has been delayed due to pending legal challenges.

The pandemic has accelerated the shift in consumption towards digital with a more sustainable increase in consumption of OTT and other online media vs TV. TV saw an initial bump but has seen the ratings tapering down and will continue to remain affected due to lack of or delay in the release of new content primarily related to sporting events. The print media, on the other hand, was hit hard due to the pandemic and saw a massive loss of advertising revenue. The news segment has been the foremost beneficiary of increased TV viewership post-COVID. Even the online news aggregators and digital editions of mainstream media saw a significant jump in traffic. There is however a faster tapering-off effect seen in the News segment, both in TV and digital, vis-a-vis general entertainment and movies. The

Government initiatives and awareness program resulted in additional advertisement revenue and also mitigated the loss due to absence of habitual advertisers.

The total number of screens, including TV and smartphones, were projected to nearly double by 2025 and touch the 1 billion mark from 550 million in 2019. TV-sized displays were expected to reach a count of 250 million by 2025. TV will remain the largest earner of advertising revenues even in 2025, approaching 570 billion. Viewership of regional language channels will continue to grow and reach 55% of total viewership in India as their content quality improves further. Content viewed on smart TV sets will begin to reflect that consumed on mobile phones, providing a window for user-generated content companies and other nonbroadcasters to serve content on the connected TV screen. As India is multi-cultural, multi-dimensional, heterogeneous in nature and a continent in itself, the news value will remain robust in times to come, though the consumption medium may change from time to time.

BUSINESS OPERATIONS:

Broadcasting & uplinking

The Companys newsgathering capabilities are significantly enhanced by its KU Band network and strong relationships with international news agencies. It has an arrangement with a group company for up-linking of its channels through their teleport, this group having the license for up-linking of TV channels from the competent Government authority.

Distribution

Your company is offering its channels as a part of Zee distribution bouquet of Zee Entertainment Enterprises Limited from FY 2016-17 onwards in order to achieve synergies and efficiencies in carriage cost and subscription revenue.

During the financial year, Telecom regulatory Authority of India introduced new tariff regime in the beginning of 2019, wherein, a detailed planning exercise was undertaken at group level to work out an effective distribution strategy to minimise the impact of the said change on the business of ZMCL channels. As a part of the scheme, all the channels of ZMCL have been converted into paid channels, available at a very reasonable price, thereby optimising the cost associated with the distribution of these channels while still be offered as a part of Zee distribution bouquet. Zee Media is also widely consumed in web world and is very popular amongst youth, and decision makers. Zee business is one of the most frequently visited platform for Corporate, Business and Economic related issues of contemporary importance and relevance.

Advertisement Sales

To achieve the greater and better group synergies in garnering the Companys Advertisement Revenues, the Company had appointed Zee Entertainment Enterprises Limited (ZEEL) as the Advertisement Sales agent to provide a 360 combo package of genres and platforms to the media buyers.

Business Strategy

Regionalisation: The market trend across segments in the TV industry is towards localisation of content to compete with the personalisation offered by the digital medium. In a country like India, diversity in languages, culture, imperatives, politics, and mindsets across states and high population base means availability of sizeable micro-demographic and psychographic segments. Hence, a comparatively higher increase in the number of regional channels vis-a-vis national channels, and their market share is observed. The Company has also embraced this characteristic and is at the forefront by creating a diverse portfolio of 14 TV news channels and 20 digital properties (with few more in the pipeline) in the news segment, one of the few media houses within the country with such a large number of news channels and digital properties in its portfolio.

Pushing for Market Share: TRAIs NTO implemented in 2019 led to a consolidation of the subscriber and viewer base of all the network channels. The Companys primary area of focus has been to address this challenge by improving the attractiveness, scope, scale, and engagement level of the content across all the channels to capture a larger market share or maintain market leadership. It has also revised continuously its distribution strategy to level up on the extraordinary market scenario. A major focus area during the year was the programming around the general election, which included on-ground reporting, views, analyses, and through various conclaves and forums, as it was the big daddy of current affairs from a viewership perspective.

Diversification of Medium: The Company is in the business of creating content and increasing its reach and engagement. It has diversified across mediums and platforms so as enable greater leverage of its content and more opportunities for subscription, advertising, and syndication incomes. While TV and Digital remain the high volume and high growth mediums that are the main focus area, the Company has also persistently endeavoured to build event and activation properties across all its channels to provide broader and deeper engagement opportunities for advertising. In FY2019- 20, the emphasis was on replicating this strategy more strongly for the regional channels in its bouquet as well.

Leveraging Group Synergies: The Company collaborates with its group entities in the M&E sector to offer its channels as a part of Zee distribution bouquet to create efficiencies in distribution, carriage cost, and subscription revenue. The Company is ready to work with its distribution partners to minimise any negative impact if the NTO 2.0 of January 2020 is implemented. Similar synergies have been exploited for advertisement sales by working with ZEEL as the sales agent to enable increased cumulative reach for the media buyers and increased revenues for all media entities of the Group, including the Company. These synergies have not only resulted in relatively higher revenue growth for the Company but also made it one of the most profitable news medi a networks in the country.

Business Strengths

Group Brand Equity: Being a part of the Essel Group, and legacy and brand equity of ZEEL gives the Company an advantage in the market in terms of brand recall, and distribution and advertising sales synergies vis-a-vis standalone news networks.

Diverse Portfolio: Wider reach to micro-demographic and psychographic segments through a plethora of regional channels targeting most of the major states of the country.

Key Personnel: The channels of the network have invested in quality journalists, anchors, editorial, and production staff to produce topical, relevant, and absorbing content that resonates with the audience. The recent attraction of web based news consumption is complementing the traditional news genre and thereby further enhancing the inter scope of revenue generation and wider acceptability.

Business Overview

During the year under review, the network was focused on consolidation of its existing offerings including stabilisation of the recently launched regional channels in the NTO regime and delivering a comprehensive, visually appealing and highly analytical coverage of the general elections during April - May 2019. While the election-related boost meant the network had a total of 308 million viewers in the first quarter of the FY2019-20 (Source: BARC, NCCS 2+, All India, ZMCL Channels, 24hrs, 1st Apr - 30th Jun 2019 Coverage), it ended the year with a reach of more than 190 million viewers through its 14 television channels (Source: BARC, All 2+ yrs., India, ZMCL Channels, 24 hrs, Week 0120 - 1320, average weekly cumulative reach.).

• The general elections were covered under a joint branding of Abki Baar Kiski Sarkar through a diverse format of programs by all the channels of the network. Several conclaves were organised across the country to provide a platform for contesting parties to bring forth their respective direction for the future and analyse developments during the last five years.

Zee News: The networks flagship channel was aimed at delivering news that touches the pulse of the nation and enjoyed the highest average time spent by viewers across the Hindi news genre.

• The channel organised India Ka DNA conclave as part of the coverage of the general elections.

• A campaign by ZEE News to bring forth the broad-based support enjoyed by the Citizenship Amendment Act and further promote awareness by asking the people who supported CAB/CAA to give a missed call made history, as a colossal number of over 1 Crore people gave their endorsement.

• Since March 2020, ZEE News has been at the forefront fighting against the COVID-19 pandemic by providing the best in-depth reportage and social help through various novel initiatives like Ask ZEE and positive and inspirational news coverage with stories ranging from the smallest towns in India to the international view of the issue.

Zee Business: The networks National Business News channel adopted the approach of expanding the coverage to highly diverse segments of the Indian economy for increasing its reach during the year. It was ranked 1st with a viewership of over 2 million viewers in the key demographic segment for business news. (Source: BARC, All 22+, Male ABC, HSM, 0600-2400 hrs, Week 0120 - 1320, Average weekly cumulative reach).

• Prime examples of the channels shift in focus were its inventive programming properties such as Super Mechanic Contest, for car and bike mechanics, and Khet Asanas, i.e. Yoga for farmers that covered the prominent but hitherto neglected constituents of the Indian economy.

• Another example of its strategy was its endeavours to support the SMEs of the country through deliberations on policies for SMEs, technology facilitation, market linkages, and business support. These discussions were held through 40 boardroom breakfast forums titled Dare to Dream: Growth Matters involving key stakeholders across multiple cities with support from relevant industry associations.

• Highly dedicated stock market centric novel shows were launched, which grabbed the limelight. Bazaar Ka Bottom, Bazaar Ke 5 Star, Kya Bottom Ban Gaya Hai. It also made a mark with the first-ever sting operation by a Business News channel to expose swindlers with a distinctive show Market Mafia, which also outlined steps that investors needed to take to protect their wealth. It followed up with another winning investigative program Operation Hafta Vasooli to reveal fake identities of scamsters and their ploys.

• With the onset COVID-19, programming was customised and new shows such as Corporate Aur Corona, Zee Positive, #StarsOnZeeBusiness were launched.

WiON: Indias first Global News channel, continued to carve out a niche for itself. There was a surge in digital media consumption of the channel post Coronavirus pandemic with over 100% growth in all platforms.

• It provided extensive coverage of Indias participation in UN General Assembly meeting in New York in collaboration with Voice of America, USAs federal broadcasting agency.

• Channels events such as the E-mobility Summit in

October, WION World Order - Talking Diplomacy, and Mission Smart Cities 2020 in December with critical stakeholders including ministers, industry leaders and distinguished guests were fruitful in getting an encouraging response from the audiences.

• WIONs continuous Coronavirus coverage with correspondents from across the world went viral with millions of views online and retweets from leaders.

• WION entered into a mutual partnership with Russian media outlet and information agency Sputnik, on the sidelines of Eastern Economic Forum and Prime Minister Narendra Modis visit to Russia. Through the alliance, the two networks aim to amplify digital and broadcast content of the two nations with technologically enhanced communication.

Zee Hindustan: The networks 2nd national Hindi news channel focused only on ground-breaking and analytical news programming under its new avatar. It reached a viewership of over 53.6 million through continued focus on unique news programming (Source: BARC, All 15+, HSM, 0600-2400 hrs, Week 0120 - 1320, average weekly cumulative reach).

• Channel organised events in Udaipur and Meerut with various industries experts who discussed the industries of Udaipur and Meerut and how they are contributing to the Indian economy, followed by felicitations.

• The network expanded its footprints into Southern India through the launch of Zee Hindustan in Tamil and Telugu languages to make the networks content accessible to a broader audience.

Zee 24 Ghanta: The networks Bengali news offering won the hearts of its audience because of its diverse content and reached more than 14.2 million viewers (Source: BARC, All 15+, West Bengal, 0600-2400 hrs, Week 0120 - 1320, Average weekly cumulative reach).

• Continuing with the networks tradition of recognising the contributions of women in India, the channel organised Swayam Siddha Awards to felicitate and celebrate the success of women from different walks of life.

• Channel launched two new programs - Sargorom 5 Ta and Street Fight where the studio was taken out to viewers which allowed them to be a part of crucial discussions.

Zee 24 Taas: The networks Marathi news offering reached 18.9 million audiences across India on account of the quality and pertinence of its content (Source: BARC, All 15+, Mah/ Goa, 0600-2400 hrs, Week 0120 - 1320, average weekly cumulative reach).

• The channel organised Krushi Sanman to acknowledge and honour the heroes in the field of agriculture who have achieved extraordinary feats despite adversities.

Zee Punjab Haryana Himachal: This channel addresses the audiences across Himachal Pradesh and Haryana, besides Punjab. It was ranked 1st with a 29.4% market share and reached more than 5.50 million viewers (Source: BARC, All 15+, PHCHPJ&K, 0600-2400 hrs, Week 0120 - 1320). It also enjoyed one of the highest viewer stickiness in the market.

• Channel provided the platform Himachal Varta to various parties to contemplate on and to discuss the developmental strategies for the state.

Zee Madhya pradesh chhattisgarh: The channel, through its relevant and engaging content, maintained its dominant position in the region with 49.4% market share, 18.1 minutes viewer stickiness and more than 3.56 million coverage. (Source: BARC, All 15+, MP/CG, 0600-2400 hrs, Week 0120 - 1320).

• The channel sought to bring forward the current dispensations plans for the development of their respective states through Gauravshali Madhya Pradesh and Gauravshali Chhattisgarh forums where key ministers laid out the blueprints for growth.

• The channel provided a platform to the MSME owners and entrepreneurs from these states at its MSME Conclave in New Delhi, where they put forth their problems and challenges in todays economic scenario.

Zee Rajasthan: The networks offering for viewers across Rajasthan, had the 1st ranking with 20.4 minutes viewer stickiness (Source: BARC, All 15+, Rajasthan, 0600-2400 hrs, Week 0120 - 1320, weekly ATSV).

• It honoured the states police officers who had performed outstanding acts of bravery while on or off duty. Through Women Empowerment Awards, the channel recognised women achievers from different streams.

• It also televised programs with participation of top political leaders, including ministers from the newly formed state government, to discuss and debate their thoughts and party manifestos for the general elections.

Zee Bihar Jharkhand: The channel, which covers populations of Bihar and Jharkhand, continued to win the heart of the region, and retained its 1st position with 66.4% market share, 20.2 minutes ATSV and reached more than 3.03 million (Source: BARC, NCCS 15+, Bihar Jharkhand Week 142019 - 132020).

• The channels Election Conclaves in both states allowed viewers to get a complete and vivid perspective on the plans of each of the parties for their respective states.

• The channel conducted a grand summit on Real Estate to increase the awareness of the Real Estate sector and felicitated the states water conservationists through Jal Nayak Awards.

Zee Odisha: The networks offering for the Odisha market, grabbed the Odia audience and reached over 4.15 million viewers (Source: BARC, All 15+, Odisha, 0600-2400 hrs, Week 0120 - 1320, average weekly cumulative reach).

• The channel organised a Health Conclave, a panel discussion on healthcare and supporting infrastructure in the state of Odisha.

Zee Uttar Pradesh Uttarakhand: The networks latest offering for the Hindi heartland achieved a 9.8 minutes viewer stickiness and reached more than 1.9 million viewers (Source: BARC, All 15+, UP/UK, 0600-2400 hrs, Week 0120 - 1320).

• The channel organised Real Estate Conclave to initiate a dialogue between the real estate players and government bodies for evaluating the current scenario and felicitate the achievers from the sector.

• The channel organised Business Leadership Conclave in Dehradun and Lucknow to discuss the challenges and aspirations of the business community.

Zee Salaam: The offering, targeted at Urdu speaking audience nationally, has been leading the genre in viewer stickiness since inception (*Source: BARC, NCCS 15+, All India, Week 142019 - 132020, ATSV). It ended the year on the top position with a 58.2% market share and 16.6 minutes ATSV (Source: BARC, All 15+, India, 0600-2400 hrs, Week 0120 - 1320).

Zee 24 Kalak: The networks offering for Gujarati audience, reached more than 5.8 million viewers (Source: BARC, All 15+, Guj/D&D/DNH, 0600-2400 hrs, Week 0120 - 1320, average weekly cumulative reach).

• The channel shifted its focus towards education by organising Education Excellence Awards to recognise the contribution of leading educationists in Gujarats education sector.

Awards & Recognitions:

• The network sustained its unbeaten streak of winning coveted recognitions for its good journalism and programming by receiving three awards at the BCS Ratna Awards 2018 including Most Trusted News Channel (Zee News), Best Primetime News Show (DNA), and Best Story Coverage (Toxic Vegetables).

• At the E4M News Broadcasting Awards 2019 (ENBA 2019), Zee News was proclaimed as the winner in 8 prestigious award categories.

coviD impact on News Genre:

• Hindi News Genre: During Lockdown Period (WK 122220), Hindi News Genre grew from 792 million to 2.0 billion (growth of 154%) in terms of Average weekly Gross Imp000 whereas Zee News grew from 94.9 million to 215.2 million (by 127%) & Zee Hindustan grew from

23.8 million to 62.1 million (by 161%).

• English News Genre saw 2x growth from 1.8 million to

3.8 million, whereas WION grew by 3.2x.

• Zee Business witnessed a growth of 67%, whereas the genre grew by 40%.

• Marathi News genre grew by 3.2x times, whereas Zee 24 Taas witnessed 3.5x times growth in terms of Average weekly Gross Imp000.

• 24 Ghanta has increased by 243% from 13.8 million to 47.4 million in terms of Average weekly Gross Imp000, whereas the genre grew by 206%.

• Zee 24 Kalak has increased by 441% from 4.6 million to

25.1 million in terms of Average weekly Gross Imp000, whereas the genre grew by 305

• In Bihar, both the genre (from 5.2 million to 24.4 million) & our channel (from 3.5 million to 16.5 million) grew by 373% in terms of Average weekly Gross Imp000, whereas in terms of Average weekly Cume Reach000, Zee Bihar Jharkhand grew by 187% & the genre grew by 162%.

• Zee Odisha saw a growth of 155% from 2.7 million to 6.9 million, whereas the genre grew by 142% from 44.6 million to 107.8 million in terms of Average weekly Gross Imp000.

• In Rajasthan the news genre witnessed a growth of 249% from 8.2 million to 28.7 million, whereas Zee Rajasthan grew by 496% from 2.6 million to 15.7 million in terms of Average weekly Gross Imp000.

• UPUK news genre witnessed a growth of 93% from 12.0 million to 23.2 million, whereas Zee UP/UK grew by 404% from 0.7 million to 3.6 million in terms of Average weekly Gross Imp000

• MP/CG news genre witnessed a growth of 6.4x times from 5.8 million to 36.7 million, whereas Zee MPCG grew by 6.6x times from 2.3 million to 15.2 million in terms of Average weekly Gross Imp000.

• Zee PHH grew by 2.4x times from 4.1 million to 10.1 million, whereas the genre grew by only 2.0x times from 8.0 million to 15.7 million in terms of Average weekly Cume Reach000.

• Zee Salaam grew by 33% from 4.6 million to 6.1 million, whereas the genre grew by 29% from 8.0 million to 10.3 million in terms of Average weekly Gross Imp000.

Digital

The networks social media pages complement the broadcast channels and consistently interact with viewers, making them the most engaging social media pages in the industry.

During the year, your network took two major steps to synergize the broadcast and digital businesses leading to strong growth across the digital portfolio. First, to utilize the brand strength of various channels, the network launched 12 new brand websites (to complement its channel portfolio) and 3 more languages (Odia, Punjabi, and Urdu) leading to expansion of portfolio to 18 brands. Secondly, to ensure percolation of "Digital First" philosophy in the entire organisation and to streamline news flow, the broadcast and digital editorial teams for each channel were aligned together.

Consequently, during the year, the language news portfolio together attracted more than 450 million visitors and more than 5 billion pageviews. Zeebusiness.in, your networks business news offering for digital platforms, registered 42% growth in visitors to 98 million and 64% growth in pageviews to 333 million. Wionews.com, your networks English Global News platform, witnessed 44% growth in visitors to 6.6 million and 2x growth in pageviews to 56 million.

Your networks social media pages continue to complement respective broadcast as well digital platforms and consistently interact with viewers, making them the most engaging social media pages in the industry. As of March 2020, your network had crossed more than 70 million followers across various social media platforms.

internal Control Systems

The Company has in place adequate internal control systems, commensurate with its size and nature of operations to ensure smoothness of operations and compliance with applicable legislation. The Company has a well-defined Management Information System (MIS) and periodic business review process to ensure effective decision-making, robust controls, and timely course corrections. All operating parameters are monitored and controlled. Any pertinent changes in the outlook and material deviations from the annual budget are reported to the Board every quarter. Effective budgetary control on all capital expenditure ensures that actual spending is in line with the Capital Budget.

The Company has an internal audit team, further strengthening the internal audit platform with professionally qualified financial personnel, which conducts periodic audits of all businesses to maintain a proper system of checks and control. Every quarter, non-compliances with processes and systems are reported to the Board, combined with actions taken to address the non-compliances.

Human Resources

The Company is committed to the growth of its talent instep with the growth of its businesses. It aims to provide a highly motivating and engaging workplace to enable the delivery of sustainable organizational performance and fulfilling experience to its teams. Much of this enablement is through a focus on acquiring the right talent, training, career development, and recognition in line with the Companys vision and strategic goals. The Companys Employee strength as on March 31,2020 was 1,719 in comparison to 1,847 as on March 31 , 2019. HR also acts as a leading change agent to facilitate organizational transformation initiatives to achieve and maintain industry leadership.

RISKS & MiTiGATiON

High Competitive intensity

With the News Broadcasting segment touching 386 channels (42% of the total channels), the competition in the TV news industry for viewership (only 9% of the total viewers) and advertising pie is intense. Additionally, alternative technology-enabled distribution platforms launched by newer players further fragment the market. To sustain its financial performance and retain or grow its market share in the face of such extreme competition, the Company will need to anticipate viewer preferences to create, acquire, commission, and produce compelling content favoured by the consumers and leverage technology to synergize across distribution platforms. However, better understanding of the major events, quality of correspondence, first mover advantage and presence across the Country - is helping Zee Media to withstand with the pressure of competition and will continue to maintain its position in the years to come.

regulatory impact on Business Model

The Companys business is affected by regulations that span cable and broadcasting, advertisement, telecommunications, intellectual property, consumer, and competition (anti-trust) laws and regulations. Stability of the regulatory environment is paramount to the predictability and level-playing field in terms of the business environment. Any sudden or frequent or ill-considered changes in regulations could hurt the Companys business.

The implementation of New Tariff Order (NTO) 1.0 in 2019 had changed the distribution models for all broadcasters, including the Company. The NTO being in place for more than a year now, has stabilised the new models adopted by the broadcasters however if similar drastic measures are taken by the Regulator again, it could bear negative consequences for the business performance on a short to mid-term basis. The TRAI had notified certain changes in the NTO however the same has not been put into effect by the TRAI since the same has been challenged before the High Court and the outcome is awaited.

success of New initiatives

The Company may invest in new diversification and expansion initiatives to bolster its position in the news content genre. These initiatives may or may not be a success, which depends upon various external and internal factors. The Company may fail in achieving the targeted revenue and profitability in these initiatives despite detailed workings and research, which would delay in achieving breakeven on these initiatives.

predictability of Advertisement income

The market share of the Company in Advertisement Income is linked to the volume, quality, timing, and sustainability of the viewership it receives. If there are any adverse effects on the viewership ratings through these parameters, there may be a consequent decline in advertising revenues indicating a loss of market share. The Advertisement Income is also affected sharply by the changes in the broader economy, performance of specific industries, and individual fortunes of its advertisers. Any drop in advertisement income will be apparent through a substantial decline in aggregate revenues. The Company mitigates this risk through diversification in the business portfolio to manage external factors and superior content creation to manage internal factors.

Ability to hire and retain skilled Manpower

Media content creation is a people-intensive activity, and any shortfall of qualified and skilled personnel, either through failure to hire new or retain existing employees, would adversely affect the Companys performance. Furthermore, the celebrity chief editors and news presenters/anchors develop a dedicated viewer base, which may be lost if the Company is unable to hold on to them. The Company has seen such instances in the past and overcame them through replacement, diversification, and planned exit strategies for key personnel. Recent initiatives and programs undertaken

to improvise the interactivity and involvement of employee through town hall, continuous dialogue on major issues facing the employees and overall training and re-training to keep the force abreast with the contemporary ideas and practices - will always go in strengthening the bondage amongst employees and reduce the churn going forward.

intellectual Property and Proprietary Rights Protection

The Company depends on trademark, copyright, and other intellectual property laws to establish and protect its rights on the brand names, content, and platforms it creates. The Companys rights may be disputed, nullified, or by-passed causing it a loss through the diversion of viewership, inability to leverage its content, and loss of reputation.

Liability Risks

As a responsible, mainstream news organization, any news or content broadcasted, posted, or published by the Company that is either defamatory, inaccurate, or plagiarised may attract litigation for defamation, litigation for IP infringement, or fines from regulators. The Company relies on editors, reporters, freelance journalists, stringers, and news wires and agencies for news and other content. It has put in place systems and protocols to ensure the authenticity of reports and originality of content by the contributors. Moreover, the Liability of Directors and Officers is also covered to ensure that any unwanted / unseen risk is taken care of.

FINANCIALS AND FiNANCiAL POSITION

Standalone and consolidated Financials as on March 31, 2020:

The table below presents Standalone and Consolidated Financials for the Current and Previous Financial Years.

Rs. million

Profit and Loss account for the year ended

standalone

consolidated

2020 2019 2020 2019
revenues
Revenue from operations 5,593.45 6,071.11 6,317.52 6,869.18
Other income 93.90 116.29 90.62 116.64
total revenues 5,687.35 6,187.40 6,408.14 6,985.82
Expenses
Operational cost 1,015.87 1,069.56 1,095.19 1,137.70
Employee benefits expense 1,490.78 1,419.33 1,594.09 1,521.92
Other expenses 1,639.53 2,303.10 1,803.24 2,473.20
total expenses 4,146.18 4,791.99 4,492.52 5,132.82
operating profit 1,541.17 1,395.41 1,915.62 1,853.00
Finance costs 237.91 178.81 240.10 180.08
Depreciation and amortisation expense 718.32 471.65 879.72 553.95
profit/doss) before exceptional items and tax 584.94 744.95 795.80 1,118.97
Share of profit / (loss) of associates - - 26.15 (5.59)
Exceptional Items (net) (3,255.35) (1,033.46) (3,255.35) (621.32)
profit/doss) before tax from continuing operations (2,670.41) (288.51) (2,433.40) 492.06
Less: Tax expense 214.71 264.24 277.75 360.32
profit/doss) after tax from continuing operations (2,885.12) (552.75) (2,711.15) 131.74
Add: Profit / (loss) from discontinued operations after tax - - - (194.93)
profit/doss) after tax before minority interest (2,885.12) (552.75) (2,711.15) (63.19)
Less : Non-controlling interest - - - 8.30
profit/doss) after tax (2,885.12) (552.75) (2,711.15) (71.49)

million

Balance Sheet as at

standalone

consolidated

20201 2019 2020 2019
Assets
Non-current assets
Property, plant and equipment 2,241.08 1,646.32 2,699.37 2,091.52
Capital work-in-progress 2.19 - 2.19 0.40
Investment property 9.65 - 9.65 -
Investment property under development 19.49 35.06 19.49 35.06
Other intangible assets 187.74 313.66 207.83 347.52
Investment in associates - - 488.17 462.02
Financial assets
Investments 1,332.93 4,662.13 215.00 3,544.20
Loans 100.00 100.00 - -
Other financial assets 51.57 69.06 51.57 78.00
Non-current tax assets (net) 33.70 25.83 46.05 27.70
Deferred tax assets (net) 170.48 164.77 189.13 172.48
Other non-current assets 51.46 80.55 51.78 84.74
4,200.29 7,097.38 3,980.23 6,843.64
Current assets
Inventories 32.50 - 32.50
Financial assets
Investments - 300.00 - 300.00
Trade receivables 1,834.21 1,847.63 2,000.97 2,076.04
Cash and cash equivalents 138.25 126.75 472.10 243.03
Other bank balances 60.23 0.93 60.23 0.93
Loans - - - 33.00
Other financial assets 258.12 394.47 408.27 542.77
Other current assets 330.15 317.07 341.75 353.07
2,620.96 3,019.35 3,283.32 3,581.34
Total 6,821.25 10,116.73 7,263.55 10,424.98
Equity and Liabilities
Equity
Equity share capital 470.79 470.79 470.79 470.79
Other equity 2,856.89 5,756.63 3,177.97 5,905.14
3,327.68 6,227.42 3,648.76 6,375.93
Non-current liabilities
Financial liabilities
Borrowings 844.03 1,013.16 844.03 1,013.16
Other financial liabilities 442.95 113.91 442.95 113.91
Provisions 235.37 186.03 264.34 210.64
Other non current liabilities - 3.01 - 3.01
1,522.35 1,316.11 1,551.32 1,340.72
current liabilities
Financial liabilities
Borrowings 158.93 795.90 158.93 795.90
Trade payables 248.59 374.25 247.10 376.18
Other financial liabilities 1,238.99 1,148.27 1,300.64 1,252.65
Other current liabilities 254.72 240.25 278.60 267.30
Provisions 15.32 14.53 17.07 16.30
Current tax liabilities (net) 54.67 - 61.13 -
1,971.22 2,573.20 2,063.47 2,708.33
Total 6,821.25 10,116.73 7,263.55 10,424.98

We are pleased to present the detailed analysis of Consolidated Financials of the Company for the year ended 31 March, 2020 vis-a-vis 31 March, 2019.

TV business consists of one Global News Channel, Three National Hindi News Channels, One Pan India Urdu News and Infotainment Channel and Nine Regional News Channels, including Zee 24 Ghanta housed in Zee Akaash News Private Limited (extent of holding 60% upto 31 May 2018; ZMCL has acquired the remaining 40% in on 1 June 2018 and accordingly, ZANPL became wholly owned subsidiary w.e.f. 1 June 2018). Further, during the previous year, ZMCL has sold its entire equity stake in Ez-Mall Online Limited at an aggregate consideration of 86.00 million and Ez-Mall Online Limited ceased to be a subsidiary with effect from 30 June, 2018. Accordingly, the revenues and expenses of E-commerce business for the period ended 30 June, 2018 have been disclosed under discontinued operations, as required by the Indian Accounting Standard 105 "Non-current Assets Held for Sale and Discontinued Operations" and Schedule III of the Companies Act, 2013.

The Company continues to hold 49% stake in Today Merchandise Private Limited and Today Retail Network Private Limited that was acquired in FY 2016-17.

The Consolidated Financial Statements have been prepared after knocking off the effect of common services among the Companies.

The Company has adopted Ind AS 116 - "Leases" effective 1 April 2019 and applied the standard to lease contracts existing on the date of initial application i.e. 1 April 2019 using modified retrospective approach to replace rent expenses in the statement of profit and loss with interest and depreciation. The application of Ind AS 116 has resulted into recognition of Right-of-Use asset with a corresponding Lease Liability in the Balance Sheet. The related Right-of- Use asset is depreciated over the tenure of the lease on straight line basis, and lease payments earlier expensed as rent gets recognised as depreciation on asset and interest on lease liability.

Revenue from Operations

The Company is undergoing an organic growth, both in terms of volume as well as in terms of efficiencies as depicted by the EBITDA margins. The operating margins of the Company have been constantly improving, not only for the existing channels but also for recent launches. The stellar performance had been due to our foresightedness in diversifying client portfolios, as well as initiating a tight control on the middle line, foreseeing the weak macro-economic environment.

Revenue from business operations mainly includes Advertisement Income, Subscription Income, Sale of Programs and Content and Channel management fees. During the year, revenues from operations have declined by 8%, from 6,869.18 million in FY19 to 6,317.52 million in FY20. The said decline is mainly attributable to the reduction in advertisement income by 326.32 million, on account of the economic slowdown evident in the second part of the year, which made us change our revenue strategy as well as clientele, focussing on newer clients while retaining old customer base. Our foresight in diversification has helped in cushioning the revenue downside. The Companys resilience is a function of its diversified portfolio, where the business is not concentrated in one or two channels. Also, the mix of national and regional channels allows it to target a wide array of viewer demographic. The revenue boost in FY2018- 19 from the events organized in the lead up to the general election could not sustain in FY2019-20. However, Events and Activations present a continued opportunity for the Company to tap into for business.

Further, during the year when NTO roll-out was stabilizing, the Company was also working on its reach strategy which although has reduced cost, it has dented the subscription revenues by 92.24 million. However, the net impact (cost saving over revenue hit) is still positive.

The Company has also focussed more on core operations and accordingly, the Channel management fee has reduced by 130.65 million.

Other income

Other Income has reduced by 26.02 million mainly due to lower amount of write-backs of provisions vis-a-vis previous year, as also due to lower interest income on investments, due to maturity of some deposits. Additionally, some write-backs of provisions have been disclosed under Exceptional Items.

Operational Cost

During the year, the Company has undertaken various cost optimisation measures such as moving to lower cost bureaus, renegotiation costs like lease-lines, travelling and vehicle hiring etc. As a result, while the overall costs generally go up, the operational cost has decreased by 42.51 million, from 1,137.70 million in FY19 to 1,095.19 million in FY20, a decrease of 4%.

Employee Benefit Expenses

Personnel cost has increased marginally by 5% or 72.17 million from 1,521.92 in FY 19 million to 1,594.09 million in FY 20, despite a decrease in overall employee numbers as compared to FY 19, which is in line with the Companys continuous investment in hiring and retaining the best talent of the Industry, and also includes the increment given to employees in FY 20.

Finance Cost

The finance cost seems to have increased by 60.02 million (or by 33%), however this also includes interest on lease liabilities of 68.26 million, consequent to adoption of Ind AS 116. Without considering this adjustment, the Finance Cost has reduced by 5%, indicating a strong control on working capital and finance cost.

Depreciation and amortisation expense

Depreciation cost has increased by 59%, or 325.77 million, of which 209.31 million pertains to the depreciation on Right- of-Use asset, in line with adoption of Ind AS 116. Apart from that, depreciation has increased due to additions to the gross block of property, plant and equipment involving investment in technology platforms for future growth and for bringing in operational performance enhancements to strengthen and optimise the news aggregation related activities.

Other Expenses

Other expenses which include all Administrative, Selling and Distribution expenses, have decreased by 669.96 million, from 2,473.20 million in FY19 to 1803.24 million in FY20. The decrease is attributable to the reversal of operating lease expenses upon adoption of Ind AS 116 (242.20 million), as well as on account of cost optimisation strategies adopted in distribution. Further, the cost has reduced due to reduction in commission on advertisement sales.

Exceptional items

Exceptional Items (costs) of 3,255.35 million have two constituents - provisions / liabilities written back of 73.85 million and impairment loss on financial instrument of 3,329.20 million.

ZMCL has investment in 6% Non-Cumulative Non-Convertible

Redeemable Preference Shares of DMCL, which is measured at amortized cost as per Ind AS 109 "Financial Instruments". As required by Ind AS 109, the investment was tested for impairment as at the reporting date. With the current impairment provision of 3,329.20 million and impairment provision of 1,033.46 million provided during the year ended 31 March 2019, the entire investment in DMCL of 4,362.66 million is fully provided for.

Tax Expense is in line with the rates of taxes as per relevant provisions of Income Tax Act.

FINANCiAL POSITION

ASSETS

Non-current Assets

The net addition to tangible (Property, plant and equipment) and intangible assets including capital work-in-progress and investment property is 464.03 million, primarily due to recognition of "Right to use assets" on adoption of Ind AS 116 (carrying value of 594.34 million), apart from additions to and disposals from the gross block and depreciation and amortisation charge for the year.

Investment in associates of 488.17 million is comprised of investment in two entities engaged in E-commerce business (Today Merchandise Private Limited and Today Retail Network Private Limited), in which the Company has 49% equity stake, along with the companys share of profit and / or loss.

Financial assets

(i) Non-current investments now stands at 215.00 million, as compared to 3,544.20 million in FY19, the reduction of 3,329.20 million being attributable to the impairment provision on the Non-Convertible, Redeemable Preference Shares of Diligent Media Corporation Limited as discussed earlier.

(ii) other Non-current financial assets have reduced marginally by 26.43 million due to refund of deposits given earlier for operations.

Non-current tax assets and Deferred tax assets have increased majorly due to deferred tax asset creation on additions made to fixed assets due to Ind AS 116 during current year operations.

other non-current assets have decreased by 32.96 million, upon amortization of prepaid expenses.

CURRENT ASSETS

Inventories (stock of programs) purchased during the previous year have been consumed during the current year.

Financial assets

(i) Current investments - The Companys investment in Certificate of Deposit of 300.00 million has been matured and redeemed in the current financial year.

(ii) Trade receivables have reduced by approximately 4%, indicating a tight control on collections.

(iii) Cash and cash equivalents and Other Bank Balances

have increased by 288.37 million, primarily due to increased collection towards the end of the year, as well as on account of fixed deposits placed under lien.

(iv) Loan of 33.00 million includes ICDs that have been given during the previous year for deployment of investible funds, which have now been provided on prudence basis.

(v) other financial assets have reduced by 134.50 million from 542.77 million in FY19 to 408.27 million in FY20, mainly due to refund of deposits given earlier for business purposes.

other current assets which include tax assets have decreased marginally by 3%.

equity & LIABILITIES:

Total equity for the year (including non-controlling interest) has reduced from 6,375.93 million in FY19 to 3,648.76 million in FY20, reflecting changes in other equity - which is a result of operations for the current financial year. The high reduction is on account of the provision for impairment of investment, as explained earlier.

non-current liabilities

Non-current Borrowings have decreased by 169.13 million, due to repayments of the term loan installments.

other Non-current financial liabilities have increased by 329.04 million, which has two components. The first is movement of deposits from Non-Current to Current, due to redemption period and the second is addition of lease liabilities of 442.95 million, consequent to the adoption of Ind AS 116.

Non-current provisions have increased by 53.70 million, which is due to increase in provision for employee benefits, in line with actuarial valuation.

other non-current liabilities have moved to other current liabilities, in line with the due date.

current liabilities

current Borrowings have reduced by 636.97 million, due to higher collections received in the year.

Trade payables have reduced by 129.08 million, due to payment of liabilities.

other current financial liabilities have increased by 47.99 million, or 4%.

other current liabilities have increased nominally by 11.31 million.

current portion of provisions for employee benefits have increased marginally by 0.77 million, in line with actuarial estimates.

current tax liabilities (net) stand at 61.13 million as at end of the year.